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Gala2k [10]
3 years ago
6

A stock with a current market price of $50 and a strike price of $45 has an associated put option priced at $3.50. This put has

an intrinsic value of ______ and a time value of _____.
PLEASE SHOW ALL STEPS, THANK YOU!

A.) $5; $3.50
B.) $3.50; $5
C.) $3.50; $0
D.) $0; $3.50
Business
1 answer:
Rashid [163]3 years ago
6 0

Answer:

The answer is D

Explanation:

Intrinsic value can be found by simply using the following formula

Put intrinsic value = Strike Price - Current selling price

this gives,

PIV = $45 - $50 = $-5

A put intrinsic value cannot be vegetative as it can be exercised right now at the current price. Thus it is interpreted as 0.

Time value is calculated as follows

Time Value = Option Price - Intrinsic Value

This gives   TV = $3.5 - $0 = $3.5

Hope this helps.

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Dmitriy789 [7]

Answer:

The North American Free Trade Agreements

Explanation:

The reason is that the free trade agreements eliminates the price escalation which is imposed by the other countries on importing these goods. So as a result the market becomes less attractive to the company because its product are not able to compete in that environment. The FTA helps organizations to use the resources of other countries with which the country has free trade agreements to lower its costs to compete competitors. The vital resource in Mexico is cheap labor cost and America has one of the best technologies in the world.

7 0
3 years ago
One might infer from a debit balance in allowance for doubtful accounts that
shtirl [24]

Answer:

The answer is:

More accounts have been written off than had been estimated

Explanation:

Doubtful debt or bad debt is an expense. According to the rule of accounting, debit increases an expense while debit decreases an expense.

So the debit balance balance in allowance for doubtful accounts tells us that there is an increase in expense which means that more accounts(bad debt) have been written off.

So we can infer from the debit balance that more accounts have been written off than had been estimated

3 0
3 years ago
Following the Enron debacle, which resulted in employees losing 100% of their 401(k), Congress enacted new laws to protect inves
pychu [463]

Answer:

According to my point of view whenever the employees or any individual who are aware about their money and where their money is being invested to generate more returns. More over if the investments are at high risk for them it is obvious that they should definitely take responsibility for their own investments.

8 0
3 years ago
The fundamental limitation of a matrix structure is that it ________.
Debora [2.8K]
<span>The fundamental limitation of a matrix structure is that it institutes a dual hierarchy that violates the unity-of-command principle</span>
6 0
3 years ago
An increase in the demand for loanable funds will occur if there is A. an increase in the real interest rate. B. an increase in
vodka [1.7K]

Answer:

C, a decrease in the real interest rate

Explanation:

When factors such as changes in expectation, technology, demands for goods and services, etc cause in shift in the demand curve for capital, interest rates act as the determinant of the capital demand.

If the interest rates of loans are high, capital demand will be reduced but in the event that interest rates are low, capital demand is high or increases.

Cheers

8 0
2 years ago
Read 2 more answers
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